Tripped up by the tax code
An editorial / By Dale McFeatters
Scripps Howard News Service

February 05, 2009
Thursday PM

Congress likes to talk about simplifying the tax code -- which,
bear in mind, is solely its own creation -- but never does. Perhaps
the tax problems of three of President Obama's nominees to top
posts will prompt it to act.

Nancy Killefer, Obama's choice
to be White House performance czar, withdrew over $946.69 in
back taxes, interest and penalties for a brief period when she
failed to pay the unemployment compensation tax for her household
help. This is the recurring nannygate problem that came to prominence
when it tripped up then-President Clinton's first two choices
for U.S. attorney general.

Thomas Daschle withdrew from
consideration as secretary of Health and Human Services over
$140,167 in taxes and interest because he failed to treat the
use of a company-provided car and driver for three years as taxable
income.

Treasury secretary Timothy
Geithner was roughed up in his confirmation hearings because
of $34,023 in payroll taxes from a two-year stint with the International
Monetary Fund. Either he didn't know or it failed to register
that Americans who work for international organizations that
do not deduct for Social Security are liable for both the employer
half and their own half of the federal payroll tax.

These are smart people, surely
honest, and presumably with access to good professional tax advice
and if they mess up on their taxes for whatever reason it's certainly
probable that a lot of other people are coming up short for Uncle
Sam because they don't understand the tax code, they're forgetful
or they're simply tax dodgers.

David Barlett and James Steele,
authors of "The Great American Tax Dodge" estimate
"as much as $600 billion -- more than two-thirds of the
government's stimulus package -- is lost each year as a result
of tax fraud and avoidance."

Congress could greatly cut
that shortfall by fully funding the Internal Revenue Service
and its collection and enforcement arms. It makes no sense for
Congress to enact tax laws and then cripple the agency that's
responsible for carrying them out. But going back to the Reagan
years, the lawmakers have seen better political mileage in beating
up on the agency.

Congress likes to pretend that
the IRS somehow just appeared but the Constitution says quite
clearly all bills for raising revenue shall originate in the
House, and the Senate may concur or amend. A simplified tax code
would make people more likely to comply and easier to catch if
they do not. And, as fast as we're going into debt, that $600
billion could really come in handy.